IRS may owe you a refund for coronavirus-era fines. Here’s how to apply
WASHINGTON (AP) — Tens of millions of taxpayers fined IRS Those who did not pay their taxes or filed late during the coronavirus outbreak may be entitled to a refund or cancellation of the penalties they incurred during that period.
However, this reduction is not automatic or guaranteed, and most taxpayers must request a refund or reduction of their tax liability by July 10 to get their money back.
A national taxpayer advocate, an independent watchdog of the IRS, warns that the deadline to file for relief is fast approaching after a federal court ruled late last year that taxpayers do not have to file their taxes on time during COVID-19.
Between January 2020 and July 11, 2023, the IRS had assessed more than $120 million in penalties against tens of millions of taxpayers for late filing, failure to pay taxes, or failure to make required estimated tax payments.
The case, called Kwong v. United States, ruled that COVID-19 emergency laws extended the deadline and the IRS owed taxpayers penalties. The case is still ongoing.
The taxpayer advocate notes that the problem “is widespread and not limited to a small or specialized group of taxpayers.”
Ken Kies, assistant secretary Department of TreasuryHe told the Associated Press that President Donald Trump’s Republican administration believes Kwong “was misjudged because it was a misreading of the plain language of the law.”
“We will continue to defend the legal language as written,” he said in the statement.
Still, as it stands now, taxpayers must fill out a form to protect their rights, said Alyssa Maloof Whatley, director of Frost Law, a tax firm with offices across the United States.
“It either applies or it doesn’t,” he said about the decision. “So, by protecting your request, you are actually protecting your right to that money.”
How to apply
Individuals eligible for a potential refund or deduction are those who filed late tax returns between January 20, 2020 and July 11, 2023; penalties paid for late application or payment during this period; they owed IRS penalties even if they had not paid them; or you may have submitted the international information declaration late.
The taxpayer advocate shares suggestions in a series of blog posts on his website, including that people review their IRS tax account transcripts through their online accounts to check for penalty assessments for those periods.
Who is affected
“Many taxpayers affected by this issue have low to moderate incomes,” the taxpayer advocate said. “These taxpayers are less likely to have professional representation and be knowledgeable about complex legal developments like this. As a result, they are at greater risk of missing out on the opportunity to claim a refund to which they may be entitled.”
